Saturday, October 8, 2011

John Paulson's Main Advantage Fund Down 47% thru September!


While John Paulson still has his $15 or $20B in personal wealth, the performance of his main hedge fund in 2011 is going to go down in the books as a spectacular flame out - and take a big hit out of his reputation.  September appears to have been an epic disaster.  Bloomberg is reporting his main hedge fund has almost lost HALF of its value year to date thru the end of September.  That's simply incredible.  While I have not agreed with his rosy economic outlook the past 2 years, and his emphasis on financials, I am not sure how you do that badly, especially when the broader market is only off 8-12% for the year.  It might take years to get this fund generating performance fees, due to the clawback provisions.  It will be interesting to see how much money is taken out by investors by the end of October.

  • John Paulson, the billionaire who is betting on an economic recovery by the end of 2012, has lost 47 percent this year in his largest hedge fund, according to three people with knowledge of the matter.  Paulson’s Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies, uses leverage to amplify returns
  • The fund’s gold share class declined 32 percent this year through the end of September, said the people, who asked not to be identified because the fund is private.
  • Paulson, 55, would have to return about 89 percent in the remainder of the year to break even in the Advantage Plus Fund. Paulson & Co., which is based in New York and manages $30 billion, has lost money this year on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp.
  • The Recovery Fund, which invests in assets Paulson believes will benefit from a long-term economic upturn, has fallen 31 percent this year, according to the people.

[Sep 28, 2011: From Penthouse to Outhouse - Investors Try to Avoid Paulson's Positions]
[Aug 10, 2011: John Paulson's Main funds Down 21% and 31% for the Year]
[Mar 29, 2010: Are John Paulson's Hedge Funds Now Too Big to Outperform]
[Jun 6, 2011: John Paulson's Funds have Rough May]
[Jun 21, 2011: John Paulson Has Potential $720M Loss in Sino Forest]

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